ORDER
C.N.B. Nair, Member (T)
1. The appellant is a manufacturer of pipes and tubes which are liable to central excise duty on ad valorem basis. The appellant sent a letter dated 3-11-1997 to jurisdictional Central Excise authority seeking provisional assessment (under Rule 9B of Central Excise Rules, 1944) on the basis of the price list appended with that letter. On 13-11-1997, they were informed that prices were not in the prescribed format. They were, therefore required to file the price declaration as given in the Trade Notice No. 25/94-CE so as to enable the Excise authorities to take further necessary action on the request made for provisional assessment. The appellant complied with the request. Subsequently, show cause notice dated 24-12-97 was issued stating that their request for provisional assessment was liable to be rejected. They were also asked to show cause why duty of about Rs. 8 lakhs should not be recovered in respect of the goods cleared during November, 1997. Penalty was also proposed under Rule 173Q etc. of Central Excise Rules. Two more show cause notices were issued in 1998 making the same proposal. Thus, the notice proposed recovery of a total duty demand of about Rs. 1.4 crores and imposition of penalties. After considering the appellant’s defence, the Assistant Commissioner, Ujjain confirmed the duty demand under his adjudication order dated 29-1-1999 and imposed penalty.
2. The appellant filed an appeal against that order before the Commissioner (Appeals), Central Excise, Commissioner (Appeals) rejected that appeal. The present appeal is directed against that order of the Commissioner (Appeals).
3. The contention of the learned counsel for the appellant is that in terms of proviso to Rule 9B, assessment subsequent to the filing of price list under letter dated 3-11-1997 was provisional and that short levy demand under Section 11A and penalties under various Sections and Rules do not arise when the assessments are provisional. During the hearing of the case, learned Counsel has taken us through several decisions of this Tribunal and the Hon’ble Supreme Court to show that provisions in the statute relating to recovery of short-levy of duties and imposition of penalty are not applicable to provisional assessment. We may read the relevant proviso to Rule 9B :
Rule 9B. Provisional assessment to duty. – (1) Notwithstanding anything contained in these rules, –
(a) where the assessee is unable to determine the value of excisable goods in terms of Section 4 of the Act on account of non-availability of any document or any information; or
(b) where the assessee is unable to determine the correct classification of the goods while filing the declaration under Rule 9B;
the said assessee may request the proper officer in writing the reasons for provisional assessment to duty, and the proper officer may direct after such inquiry as he deems fit, that the duty leviable on such goods shall be assessee provisionally at such rate or such value (which may not necessarily be the rate or price declared by the assessee) as may be indicated by him, if such assessee executes a bond in the proper form with such surety or sufficient security in such amount, or under such conditions as the proper officer deems fit, binding himself for payment of difference between the amount of duty as provisionally assessed and as finally assessed :
Provided that all clearances in respect of excisable goods covered under such request by the assessee submitted with the proper officer under the dated acknowledgement shall be deemed to be cleared as provisionally assessed to duty at such rate or at such value as declared by the assessee, till the date when the direction of the proper officer is issued and communicated to the assessee:
4. Based on the above proviso the appellant’s contention is that show cause notices and the impugned order should be quashed and duty liability discharged along with penalty.
5. We have perused the record and heard the learned SDR also.
6. The appellant is right in its contention that the assessments in question were provisional and the provisions in the Act and Rules relating to recovery of short-levies and penalties do not apply to provisional assessment. That does not mean that duty demand should be quashed. Instead, provisional assessments were required to be finalised in terms of Rule 9B itself and upon finali-sation of the amount, differential duty, if any, is required to be paid by the assessee or excess levy, if any, is required to be returned by the department. As the assessments were thus, required to be finalised and final amount of duty recovered, we specifically enquired from the learned Counsel whether duty demand confirmed in the proceedings was in excess of the amount actually payable. Learned counsel stated that appellant has no contest on merits against the amount of duty demanded. It is, thus, clear that duty amount demanded in the impugned proceeding is correctly payable by the assessee. Therefore, the objection of the appellant is sustainable only in regard to penalty.
7. In. the result, duty demand made in the impugned order is upheld and penalty imposed is set aside.
(Operative part of the order was already pronounced at end of hearing in the open Court)